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Ecwid raises $42M from Morgan Stanley and PeakSpan

2020, May 21 - 11:26pm

In the same week that Facebook announced a redoubled effort to make a bigger mark in e-commerce, one of its long-time partners has closed a large round of funding. Ecwid, the startup that sells e-commerce tools directly and via third parties like Square and Wix, letting businesses build e-commerce experiences on their own websites and apps, as well as via Facebook, Instagram, Amazon, Google, and more, has raised $42 million from Morgan Stanley and PeakSpan Capital.

Notably, now San Diego-based Ecwid had only raised about $6.5 million since 2009, the year it was founded in Russia as a spinout of X-Cart, a previous company founded by the founder and CEO Ruslan Fazylev; and it’s already profitable. So rather than being used to operate, Fazylev said the funding enabled earlier outside investors — Russia’s Runa Capital, iTech from Latvia and the IT-park business incubator from Kazan — cash out, and gives Ecwid funds that it can use both for acquisitions and to continue expanding its platform organically.

Ecwid is in the stable of e-commerce companies that include the likes of Shopify, BigCommerce and WooCommerce, which have seized on the growth of online shopping over the last decade and helped companies that are not digital by nature — specifically small and medium brick-and-mortar businesses — become a part of that digital economy. And to underscore that low barrier to entry, its pricing starts at free to enable shopping on a website covering 10 or fewer products. (Further priced tiers include the ability to integrate with Facebook and other sites, as well as sell more items, apply more analytics and so on.)

That mandate and opportunity to provide analogue SMBs a route to the next generation of shopping has taken on a new dimension in the last few months. Authorities in many jurisdictions have closed down brick-and-mortar establishments and offices, and restricted day-to-day movement and contact between people in an attempt to slow down the spread of the COVID-19 pandemic.

In other words, if e-commerce has been a long-term growth opportunity with upside for those that cared to invest in it, overnight it became a must-have for any small business that wanted to continue to operate through and after this health crisis.

Just as we’ve seen that trend play out for Shopify (whose share price has been on a roll), Fazylev said that Ecwid, too, has had a big boost. Ironically all that activity started after it closed the round (which was raised before COVID-19 really hit).

“The moment we signed the term sheet, things started to go really crazy,” he said. “Overnight, demand tripled because SMBs were under immense pressure to transition to online ordering. We at Ecwid are not worried about the Walmarts of the world but about the small guys and making it super easy for them. And so demand went through the roof.” Transaction volume between March and April grew by 50% and to meet demand.

Even before that, Ecwid was an under-the-radar success, which is why PeakSpan and Morgan Stanley came knocking.  Even if it’s not the 300% growth of the last couple of months, 2019 saw sign-ups double on the platform with a Net Promoter Score of above 60. (Fazylev said Ecwid lives and dies by its Net Promoter Score so he’s especially proud of this above-average figure.)

And in addition to its direct-to-SMB offering, it white labels through a number of popular channels like Wix, GoDaddy and Square. Together, there are some 1.5 million SMBs across 175 countries (and 54 languages) using its e-commerce rails. This might actually have been one reason why it wasn’t a part of the Facebook Shops news: it’s quietly enabling an army of competitors. But to be very clear, when I asked about the omission, Fazylev said he was stumped by it himself.

PeakSpan Capital Co-Founder and Managing Partner Phil Dur, and Pete Chung, Managing Director and Head of Morgan Stanley Expansion Capital, are both joining the board as part of this round.

“Covid-19 is reinforcing what we already knew: e-commerce is vital, and it’s available to even the smallest of merchants now with Ecwid’s free tools that even novice Internet users can adopt quickly,” said Dur, in a statement. “We have been watching Ecwid for many years.The company’s impressive capital efficiency and very strong long-term market opportunity made it an easy decision for us to partner with them during this next phase of growth.”

“Ecwid is truly helping its customers make the most of e-commerce enablement at a time when their traditional retail businesses have been disrupted so dramatically,” said Chung, in a statement. “Ruslan is an e-commerce visionary who has built a team and beloved solution that allows any mom-and-pop shop to embrace the online world,  dramatically expanding their revenue and market potential.”

Categories: Business News

Beware mega-unicorn paper valuations

2020, May 21 - 11:06pm

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

There’s a famous old post going around Twitter this week by entrepreneur and developer David Heinemeier Hansson (@DHH). DHH is a critic of certain elements of the startup world, especially wild valuations. This entry from him is, in my view, a classic of the genre.

The post in question is titled “Facebook is not worth $33,000,000,000,” and was written back in 2010.

You can already imagine who might find the post irksome — namely folks who are in the business of putting capital into high-growth companies. This sort of snark, though not precisely recent, is a good example of how posts like the Facebook entry are read on Twitter.

If you take a moment to actually read DHH’s blog, however, you’ll find that the first part of his argument is that selling a minute slice of a company at a high price, thus “revaluing” the company at a new, stratospheric valuation, is a little silly. DHH didn’t like that by selling a few percentage points of itself, Facebook’s worth was pegged at $33 billion. We’ve seen some similarly-small-dollar, high-valuation rounds recently that could be scooted into the same bucket.

It’s a somewhat fair point.

But what struck me this morning while re-reading the DHH piece was that his second two points are useful rubrics for framing the modern, post-unicorn era. DHH wrote that profits matter, companies are ultimately valued on them, and that companies that don’t scale financial results as they add customers (or users) aren’t great.

Categories: Business News

Boulder Care opioid treatment platform picks up traction during coronavirus

2020, May 21 - 11:00pm

With the regulations around telehealth changing rapidly during the COVID-19 pandemic, an opioid treatment platform with a digital component is finally finding a strong market foothold after facing a mountain of regulatory hurdles.

Boulder Care was founded by Stephanie Papes, a former associate at Apple Tree Partners. She first became interested in opioid treatment after facilitating the firm’s financing round with an organization called CleanSlate Addiction Centers, which focused on in-person treatment for opioid and alcohol addiction.

There are several options when it comes to opioid addiction treatment. A common one is replacement therapy via methadone, an opioid, which relieves the symptoms of withdrawal while blocking the high that comes from use of heroine and other narcotic pain relievers. There’s also in-patient treatment, which usually comes with strict rules around the use of drugs and sometimes even legal addictive substances like nicotine, with a very low-tolerance policy for relapses.

In-patient treatment is usually expensive and not often covered by insurance, and asks patients to go cold turkey. Methadone, on the other hand, requires patients to come to a clinic at least once every day. Not only does that make it difficult to live a normal life, but these clinics are often targeted by drug dealers to poach clients.

Boulder Care looks at a different approach that uses a combination of telehealth services and a prescription drug called Buprenorphine (brand name: Suboxone).

Alongside a greater risk of contracting COVID-19, and having a more severe experience of the disease than those without addiction, addicts are also at a greater risk of overdose or continued use of opioids due to social distancing and increased anxiety and stress, two huge contributing factors to addiction, according to an article published by Harvard.

Boulder Care uses telehealth to offer patients a comprehensive recovery plan, including clinician support (for medical and medication needs), a peer coach (who has lived experience with addiction and can help talk through challenges and issues) and a care advocate (who helps with administrative needs around care and insurance coverage).

“It’s not 100% abstinence-only right away,” said Papes. “It’s a journey, and every incremental step and savings for the health system is good for the individual. The work that we do, just by building that trust with our participants, telling them ‘we value you, whether or not you’re using substances, and we’re not going to kick you out of the program for having an unexpected test result on your on your drug test or telling us that you use methamphetamine.’ There are a lot of policies in some of these programs that just continue to put people in harm’s way. So residential facilities will say you can’t be here for your heroin addiction if you’re smoking cigarettes, and they’ll truly discharge you from the program if you smoke. It’s not beneficial for anyone. So, we have this clinical philosophy, it’s really important, and it’s all about unconditional support.”

One of the big challenges for Boulder Care and opioid treatment organizations across the country is the regulatory limits on prescribing Buprenorphine. Buprenorphine is an opioid partial agonist, which means it produces euphoric effects and respiratory depression at low to moderate doses. However, these effects are much weaker than a full opioid agonist like heroine or methadone.

Buprenorphine also greatly weakens the effects of withdrawal, allowing patients to try to stabilize their life and achieve a healthier lifestyle.

Unlike methadone, Buprenorphine can be prescribed by a doctor for use at home, rather than making a trip to a clinic, where patients must be examined and drug tested before they can take their dose. However, there are regulatory limits on doctors around the number of people they can prescribe Buprenorphine to in a given time period, and doctors must also pay to get training and a license to prescribe the drug.

According to Papes, this means 80% of the country who could benefit from a Buprenorphine prescription can’t get it. In fact, a HuffPost analysis showed that even if all the doctors who are licensed to prescribe Buprenorphine did so at the maximum rate in 2012, more than half of Americans suffering from opioid addiction still couldn’t get access to the drug.

Part of the reason that prescribing Buprenorphine has such strict limitations comes down to stigma, with many believing in the long-held misconception that replacing one drug for another isn’t the answer, and that abstinence is simply a challenge of mental willpower, negating the fact that addiction is a disease.

There’s no doubt about the potential efficacy of Buprenorphine. In 1995, France allowed any doctor to prescribe Buprenorphine without special licensing or training. About 10x the number of addicted patients began receiving medication-assisted treatments, cutting overdoses by nearly 80% in four years, according to the Atlantic.

Another requirement around the prescription of Buprenorphine is that the patient had to have at least one in-person visit with the doctor before they could get access to the medication.

That visit could be someone coming into a clinic or facility seeking to change their own life proactively. It could also be at the emergency room when someone is brought in for an overdose.

“It’s very challenging when someone has a tiny window in which they’re feeling like they’re ready for change, and you have to coordinate with another facility in order to get them into your care,” explained Papes.

During this national health emergency, that requirement has been waived, allowing for doctors to prescribe this medication without an in-person meeting with the patient. This is a huge boost for Boulder Care, which runs its business entirely via telehealth.

Since the start of March 2020, the company has seen 130% week-over-week increase in weekly inquiries from potential patients, and new patient enrollments is up 32%. During COVID-19, any patient who is uninsured or under-insured can get services from Boulder for free.

Boulder recently partnered with Premera Blue Cross, an insurance plan in the Pacific Northwest, to provide zero cost share options for virtual substance use disorder treatment, which will give 2.3 million customers access to Boulder Care through at least June 30. Cost shares will be waived for all patients seeking medically necessary telehealth treatment.

Alongside revamping the way patients receive treatment for substance use disorders, Boulder is also looking to change the payment model. Traditionally, the healthcare system remunerates providers based on admissions (and often, readmissions) without focusing on outcomes. Meanwhile, outpatient fee-for-service reimburses for clinical visits and drug-testing, rather than peer recovery coaching, 24/7 text messaging and same-day access, a few of the things that contribute to successful outcomes outside of clinical treatment.

Boulder partners with paying entities for “bundled” services, charging a flat rate per patient without focusing on the volume of procedures. The hope, according to Papes, is to “realign incentives and tie payment to accountability for meaningful outcomes.”

Boulder Care has raised more than $10 million with investment from Tusk Venture Partners, who led the Series A, among others.

Categories: Business News

With an ex-Uber exec as its new CEO, digital mental health service Mindstrong raises $100 million

2020, May 21 - 11:00pm

Daniel Graf has had a long career in the tech industry. From founding his own startup in the mid-2000s to working at Google, then Twitter, and finally Uber, the tech business has made him extremely wealthy.

But after leaving Uber, he wasn’t necessarily interested in working at another business… at least, not until he spent an afternoon in the spring of 2019 with an old friend, General Catalyst managing director Hemant Taneja, walking in San Francisco’s South Park neighborhood and hearing Taneja talk about a new startup called Mindstrong Health.

Taneja told Graf that by the fall of that year, he’d be working at Mindstrong… and Taneja was right.

“I was intrigued by healthtech previously,” said Graf. “The problem always was… and it sounds a little too money-oriented… but if there’s no clear visibility around who pays who in a startup, the startup isn’t going to work,” and that was always his issue with healthcare businesses. 

NEW YORK, NY – MAY 21: Daniel Graf accepts a Webby award for Google Maps for iPhone at the 17th Annual Webby Awards at Cipriani Wall Street on May 21, 2013 in New York City. (Photo by Bryan Bedder/Getty Images for The Webby Awards)

With Mindstrong, which announced today that it has raised $100 million in new financing, the issue of who pays is clear.

So Graf joined the company in November as chief executive, taking over from Paul Dagum, who remains with Mindstrong as its chief scientific officer.

“Daniel joined the company as it was moving from pure R&D into being something commercially available,” said Taneja, in an email. “In healthcare, it’s increasingly important to understand how to build for the consumer and that’s where Daniel’s experience and background comes in. Paul remains a core part of the team because none of this happens without the science.”

The company, which has developed a digital platform for providing therapy to patients with severe mental illnesses ranging from schizophrenia to obsessive compulsive disorders, is looking to tackle a problem that costs the American healthcare system $20 billion per month, Graf said.

Unlike companies like Headspace and Calm, which have focused on the mental wellness market for the mass consumer, Mindstrong is focused on people with severe mental health conditions, said Graf. That means people who are either bipolar, schizophrenic or have major depressive disorder.

It’s a much larger population than most Americans think, and they face a critical problem in their ability to receive adequate care, Graf said.

“1 in 5 adults experience mental illness, 1 in 25 experience serious mental illness, and the pandemic is making these numbers worse. Meanwhile, more than 60% of US counties don’t have a single practicing psychiatrist,” said Joe Lonsdale, the founder of 8VC, and an investor in the latest Mindstrong Health round, in a statement.  

Dagum, Mindstrong Health’s founder, has been working on the issue of how to provide better access and monitoring for indications of potential episodes of distress since 2013. The company’s technology provides a range of monitoring and measurement tools using digital biomarkers that are currently being validated through clinical trials, according to Graf.

“We’re passively measuring the usage of the phone and the timing of the keyboard strokes to measure how [a patient] is doing,” Graf said. These smartphone interactions can provide data around mental acuity and emotional valence, according to Graf — and can provide signs that someone might be having problems.

The company also provides access to therapists via phone and video consultations or text-based asynchronous communications, based on user preference.

“Think of us more as a virtual hospital… our care pathways are super complex for this population,” said Graf. “We’re not aware of other startups working with this population. These folks, the best you get right now is the county mental health.”

Mindstrong’s Series C raise included participation from new and existing investors, including General Catalyst, ARCH Ventures, Optum Ventures, Foresite Capital, 8VC, What If Ventures and Bezos Expeditions, along with other, undisclosed investors.  

And while mental health is the company’s current focus, the platform for care delivery that the company is building has broader implications for the industry, especially in the wake of the COVID-19 epidemic, according to Taneja.

“I expect that we’ll see discoveries in biomarker tech like Mindstrong’s that could be applied horizontally across almost any area of healthcare,” Taneja said in an email. “Because healthcare is so broad and varied, going vertical like Mindstrong is makes a lot of sense. There’s opportunity to become a successful and very impactful company by staying narrowly focused and solving some really hard problems for even a smaller part of the overall population.”

Categories: Business News

Indianapolis’ venture studio High Alpha launches new business bringing studio model to corporations

2020, May 21 - 10:28pm

The Indianapolis-based venture studio High Alpha has created a new business line called High Alpha Innovation to bring its startup spin-up approach to big business.

So far the firm has managed to sign on clients like the financial services firm Silicon Valley Bank, the industrial manufacturer Cummins and the security hardware and services company Allegion.

Founded by the management team behind ExactTarget, the High Alpha studio shows how new technology ecosystems can emerge when successful founders reinvest in their local technology ecosystems. The venture studio alone has managed to spin up 24 new companies that have either been publicly announced or are still in stealth mode, according to Elliott Parker, who joined High Alpha as managing director of Business Design and Corporate Innovation in May of 2018.

And those companies have already raised $140 million in follow-on funding, Parker said.

Parker heads the new High Alpha Innovation business and has already launched one company in conjunction with Cummins, the startup Anvl, which coaches field technicians on how to be safer on the job when they’re working with big machines.

“We got really good at this venture studio model and big companies started to reach out to us,” said Parker of how the new venture got started. 

Unlike accelerator or corporate venture programs that find external companies to invest in, Parker said that the High Alpha Innovation model was really about working with corporate partners to spin up businesses internally and in a collaborative way. “We are starting with problems that the corporation is facing and we’re building our own luck in a way.”

Not every collaboration between the studio and the corporate partner ends in a new business, Parker said. “A lot of times in these partnerships many of the ideas that we identify and develop along the way are transformed into a new product or service. Maybe 80% are product and only 20% are equipped to be a startup,” he said.

High Alpha receives a small amount of funding to manage operations with its corporate partners, but most of the compensation comes in the form of an equity split between High Alpha Innovation and its corporate partners in the startups that get built, according to Parker. Both the sponsoring corporation and High Alpha split the equity stake after a share allocation is made for founders and employees for the startup, Parker said.

“High Alpha Innovation is taking our venture studio playbook and applying it to innovation challenges within the world’s largest organizations,” said Mike Fitzgerald, partner at High Alpha, in a statement. “This is a major expansion opportunity for High Alpha as we serve our corporate partners and look to scale the studio model across different industries and geographies.” 

“For over 35 years, Silicon Valley Bank has supported the innovators and entrepreneurs that invent the future,” said Melody Dippold, head of Innovation at Silicon Valley Bank. “High Alpha Innovation has been an important partner as we develop new ideas, solutions and companies together that will help our clients accelerate their own growth and innovation.” 

Prior to High Alpha, Parker served as a principal at Innosight, a strategy consulting firm founded by the late Harvard Business School professor and best-selling author Clayton Christensen. 

“Every innovation leader and executive I meet is trying to figure out how to work with venture studios or launch their own corporate studio,” said Parker. “We believe the venture studio is an ideal model for overcoming the ‘Innovator’s Dilemma’ and helping companies increase the quality and quantity of their innovation efforts through startup formation. Over the last two decades, we’ve seen an explosion of corporate venture capital investing. We expect a similar trend over the next decade with corporate venture studios and believe we’re uniquely positioned to help.” 

Categories: Business News

6 CISOs share their game plans for a post-pandemic world

2020, May 21 - 10:07pm
Oren Yunger Contributor Oren Yunger is an investor at GGV Capital, focused on enterprise IT infrastructure, development tools and cybersecurity. He was previously chief information security officer at a SaaS company and a public financial institution. More posts by this contributor

Like all business leaders, chief information security officers (CISOs) have shifted their roles quickly and dramatically during the COVID-19 pandemic, but many have had to fight fires they never expected.

Most importantly, they’ve had to ensure corporate networks remain secure even with 100% of employees suddenly working from home. Controllers are moving millions between corporate accounts from their living rooms, HR managers are sharing employees’ personal information from their kitchen tables and tens of millions of workers are accessing company data using personal laptops and phones.

This unprecedented situation reveals once and for all that security is not only about preventing breaches, but also about ensuring fundamental business continuity.

While it might take time, everyone agrees the pandemic will end. But how will the cybersecurity sector look in a post-COVID-19 world? What type of software will CISOs want to buy in the near future, and two years down the road?

To find out, I asked six of the world’s leading CISOs to share their experiences during the pandemic and their plans for the future, providing insights on how cybersecurity companies should develop and market their solutions to emerge stronger:

The security sector will experience challenges, but also opportunities

The good news is, many CISOs believe that cybersecurity will weather the economic storm better than other enterprise software sectors. That’s because security has become even more top of mind during the pandemic; with the vast majority of corporate employees now working remotely, a secure network has never been more paramount, said Rinki Sethi, CISO at Rubrik. “Many security teams are now focused on ensuring they have controls in place for a completely remote workforce, so endpoint and network security, as well as identity and access management, are more important than ever,” said Sethi. “Additionally, business continuity and disaster recovery planning are critical right now — the ability to respond to a security incident and have a robust plan to recover from it is top priority for most security teams, and will continue to be for a long time.”

That’s not to say all security companies will necessarily thrive during this current economic crisis. Adrian Ludwig, CISO at Atlassian, notes that an overall decline in IT budgets will impact security spending. But the silver lining is that some companies will be acquired. “I expect we will see consolidation in the cybersecurity markets, and that most new investments by IT departments will be in basic infrastructure to facilitate work-from-home,” said Ludwig. “Less well-capitalized cybersecurity companies may want to begin thinking about potential exit opportunities sooner rather than later.”

Categories: Business News

RapidAPI raises $25M more to expand its API marketplace

2020, May 21 - 10:01pm

Less than a year after raising $25M led by Microsoft for its take on building API marketplaces, RapidAPI has rapidly followed that up with another infusion of capital as it reaches 20,000 APIs tracked, integrated, and used across its marketplace by millions of developers. Today the startup is announcing that it raised another $25 million from existing investors Andreessen Horowitz, DNS Capital, Green Bay Ventures, M12 (Microsoft’s Venture Fund), and Grove.

This is a second closing of RapidAPI’s Series B, which we first wrote about last year, bringing the total for the round to $50 million and $62.5 million overall. PitchBook notes that the startup’s previous valuation was $80 million, which would put this now at upwards of $105 million but likely higher, considering that the company has scaled by quite a bit. Co-founder and CEO Iddo Gino would not disclose the actual amount in an interview this week.

APIs are the building blocks of today’s digital world: developers use them to quickly integrate features, data, services and functions into their own apps, removing the need to build and scale all those elements themselves from scratch. But while the big selling point of using APIs is that they allow developers to integrate using only a few lines of code, that doesn’t tell the whole story. The issue is that a lot of API interfaces are not uniform and so sourcing and using a variety of them can become very time-consuming and on aggregate a lot more difficult than the basic concept of API would have you assume.

“You can’t build everything from scratch, and using APIs makes work a lot more efficient,” co-founder Iddo Gino once said to me. “But each API has a different format and authentication strategy. You have to speak a lot of different languages to use them all.”

RapidAPI’s approach is to create a framework that not only helps you find the API you are looking for, but lets you integrate them more easily by way of a single API key and SDK. It covers both free and paid APIs, and public as well as “private” APIs. When your company is a subscriber — by way of the RapidAPI for Teams product — it can also help keep track of your own organization’s API work.

The formula has been a success. There are now 18,000 teams using the Teams product among more than one million developers using the platform overall.

Within that number, RapidAPI — originally founded in Israel in 2015 and now based also in San Francisco — says that since January, it has added 300,000 new developers, up six-fold monthly compared the the same five months of 2019. The marketplace itself now has 20,000 APIs, doubling in the last year, with 1,000 getting added each month. Contributors to its marketplace include Microsoft, Twilio, SendGrid, Nexmo, Skyscanner and (our former stablemate) Crunchbase.

RapidAPI doesn’t charge people to use APIs that are already free to use. Rather it makes its money from subscriptions to its API management service as well as through serving paid APIs. It says that paid subscriptions have also grown by 30,000, with those using the enterprise tier — where you can develop your own white-label, in-house version of a marketplace for your own staff and customers — are on the rise with financial services, insurance companies, carriers and healthcare companies among those building marketplaces on RapidAPI’s rails.

While a lot of businesses, including even tech startups, have had to make big adjustments to work in our new environment and its focus on social distancing to help manage the spread of COVID-19, the same didn’t go for RapidAPI, noted Gino. The company already had remote teams — a consequence of being founded in one country and now essentially having two gravitational poles — and RapidAPI’s team of 75, and its customers, have in their culture working across different environments including virtualised ones.

What the current climate has pointed to, however, is that RapidAPI is the kind of company that stands to benefit from how other organizations are coping with digital transformation, by helping provide developers with libraries that they can use, wherever they happen to be.

Another interesting thing that has come up in the current climate is the impact it’s had on what APIs are getting the most calls. In addition to the regular roster of most popular APIs that include communications, payments and other financial services, Gino told me that APIs related to COVID-19 data have emerged as some of the most heavily trafficked, in line with how so many are working to make sense of what is going on, and how they might help the rest of us.

These include API calls for datasets and geolocation, as well as other statistics, some of which are free and some of which are paid. RapidAPI says that between March 1 and mid-May, the top five COVID APIs had more than 224 million calls with a peak of almost 4.5 million in a single day.


Categories: Business News

Spruce is eliminating the drudgery of real estate, and has $29M more from Scale to make sales easy

2020, May 21 - 10:00pm

Real estate is one of those classic industries we always talk about in Silicon Valley: multi-trillion dollars in scale in terms of assets and transaction volume, but still relying on good ole’ pen and paper to get anything actually done. A huge number of companies have launched to digitize all aspects of real estate, from calculating valuations to monitoring operational costs and underwriting mortgages.

Where top VCs are investing in real estate and proptech (Part 1 of 2)


One of those companies is New York City-based Spruce, which was founded back in 2016 to digitize the prodigious paperwork that must be completed during a real estate transaction, including handling title, ensuring all closing docs are completed, and monitoring compliance in every geographical jurisdiction they operate in. The company raised a cumulative $19.1 million in Series A funding across two tranches (my colleague Jon Shieber covered the first tranche back in 2017), and now it is poised for even more growth.

The company is announcing today that it has added $29 million in growth capital led by Alex Niehenke at Scale Venture Partners, with Zigg Capital and Bessemer participating. Niehenke has previously funded companies like Root Insurance, which is focused on offering more competitive car insurance based on realistic data from drivers.

That seems to be roughly the same thesis here with Spruce — better data and digitalization can massively improve the quality and efficiency of legacy industries.

“Instead of using local offices with manual communication and manual processes, we provide [our clients] with API’s that allow them to scale effectively and to provide great digital experiences to their customers,” said Patrick Burns, the cofounder and CEO of the company. Burns had previously done product at wealth management startup Betterment, where he also met his cofounder Andrew Weisgall.

It can be bewildering how all the startups in real estate tech fit together, but this one is simple. Spruce wants to be the workflow tool for real estate transactions, which means that they don’t underwrite mortgages or handle valuations themselves directly. Rather, the platforms wants to be the central nervous system between buyers, sellers, lenders, and all the coterie of other services required to get a transaction closed. The company handles all kinds of transactions from new home purchases by families to investor-to-investor sales.

What’s interesting is that they have two streams of revenue according to Burns. First, they take a closing fee, which is customary in real estate transactions. Spruce argues that its efficiency cuts the price of closing a transaction, ultimately saving its clients money. Second, the company earns a premium as the agent of record for the title insurance policy agreed to in the transaction, which provides a continual stream of revenue from its clients. Similar to closing fees, title insurance broker fees are customary in the industry.

It’s a pretty clear value proposition, and that’s helped it grow transaction volume dramatically. According to the company, it has processed $1.25 billion of transactions on its platform, and its revenue has grown 400% annually. With roughly five million existing homes sold in the U.S. each month, that’s still an exiguous chunk of the market.

The global pandemic underway right now has taken a massive bite out of real estate transactions, particularly for homes, since buyers mostly can’t attend showings due to social distancing policies. The upshot is that those same social distancing policies have also scrambled the traditional real estate closing, which required passels of attorneys and others to work together to get all documents signed. Spruce — and other digitalization startups in the space — are poised to transition more of that legacy paperwork onto their platforms as industry players look for online approaches.

Burns says the capital will be used to expand Spruce’s product and client partnerships. The company currently has three operations “hubs” in New York, Texas, and California.

Categories: Business News

Aspiration, the LA-based fintech focused on conscious consumerism, raises $135 million

2020, May 21 - 9:29pm

When former Bill Clinton speechwriter and political wunderkind Andrei Cherny launched Aspiration four years ago, the upstart fintech startup was one of Los Angeles’ early entrants into a  financial services market dominated by players from Europe and the financial capital of the U.S., New York City.

Fast-forward four years and the big New York fintechs are still around, but Cherny’s Aspiration remains undimmed and has today disclosed a $153 million funding round to get even bigger.

Andrei Cherny’s ‘Aspiration’ Brings The Investment Tools Of The 1% To The Other 99%

Unlike other financial services startups that compete around a suite of product offerings designed to offer no-fee checking and deposits or upfront cash payments and short-term no-interest loans, Aspiration differentiates itself with a focus on sustainability and conscious consumerism.

The company first pitched the market with an investment management service like those from Betterment and Wealthfront, but one where customers could choose their own fees. It also guaranteed investments in sustainable companies and a portfolio that would not include fossil fuel companies or other businesses deemed to be less-than-friendly to Mother Nature.

The conscious consumerism is a through-line that knits together the other products in the Aspiration portfolio, including its Impact Measurement Score product that gives customers a window into how their shopping habits measure up with their desires to be more earth-friendly.

Aspiration can now tell you the ‘social impact’ of your monthly spending

The company’s just-announced $135 million cash infusion brings the total capital raised to $200 million, and was led by local investor Alpha Edison . Additional new and existing investors — including UBS O’Connor Capital Solutions, DNS Capital, Radicle Impact, Sutter Rock, Jeff Skoll, Joseph Sanberg, Social Impact Finance, the Pohlad Companies, and AGO Partners — also participated in the financing.

So far, 1.5 million Americans have signed up to use Aspiration’s financial management and banking services, and the company has seen $4 billion in transactions pass through its accounts.

There’s a whole suite of new services designed to help customers go green, too. The company launched a matching feature where the company plants a tree for every debit card purchase that its customers make, when they round up to the nearest dollar. And it’s offering a premium subscription tier that includes debit cards made from recycled ocean plastic. The card offers higher cash back and interest rates and a feature that offsets the carbon emissions of every mile a customer drives.

Finally, Aspiration has inked partnerships with other socially conscious companies like Toms and Warby Parker, giving its customers extra cash-back rewards when they shop at those businesses.

“Aspiration has built deep, trusting customer relationships that are beginning to unlock latent demand for financial services among the tens of millions of conscious consumers,” said Nate Redmond of Alpha Edison, in a statement. “We are excited to lead a great group of investors to fuel Aspiration’s durable growth and lasting impact.”

Categories: Business News

Chief, the leadership network for women, raises $15 million in funding

2020, May 21 - 9:24pm

Chief, the social network dedicated exclusively to women in professional leadership positions, announced today that it has $15 million in funding from its existing investors, including General Catalyst, Inspired Capital, GGV Capital, Primary Venture Partners, Flybridge Capital and BoxGroup.

The startup is a highly-vetted network of women who are leaders in their business, either managing a budget, a large team or both. The women are often at the VP or executive level. The company has more than 2,000 members in New York, Los Angeles and Chicago from companies like Google, IBM, HBO, Chobani, Walmart, Visa, Teladoc, Doctors Without Borders and the New York Times.

Chief was founded by Carolyn Childers and Lindsay Kaplan, who saw an opportunity to bring community, mentorship and guidance to a very underserved client: the female business leader.

Childers was SVP of Operations at Handy and led the launch of, serving as GM there through its acquisition by Amazon. Kaplan was on the founding team of Casper, serving as VP of Communications and Brand, before leaving to co-found Chief.

Chief members are placed into a Core Group, which is industry agnostic, to receive training from one of the company’s contracted and vetted executive coaches alongside their peers. In these peer groups, members talk about their challenges and receive support and guidance from one another, as well as an executive coach. Members also have access to a community chat feature, and Chief’s events, which include leadership workshops, conversations with industry leaders and community roundtables.

Obviously, the coronavirus pandemic has put a damper on in-person features of the platform, such as Core Groups and live events. But Chief has moved swiftly to put all these core services on the web for members to attend and participate virtually.

The company has also fast-tracked the launch of its hiring board, which gives members the ability to privately list great candidates and open positions to the broader network.

Chief vets its members to ensure that the women on the platform ‘get it,’ as Kaplan likes to say.

“We all know it gets lonely at the top, and it gets a lot lonelier a lot earlier for women,” said Childers. “Women are on panels or on the circuit and they’re exhausted. This is a community they don’t have to be the one in the spotlight and feel all the pressure, but can actually be supported in a network of women who feel the exact same way. These women are the only person or one of the few people in their organization who have hit that level of leadership, and really need support from people who get it.”

The company looks at the applicants experience, the size of their organization and immediate team, the reporting structure, budget size, awards and credentials, thought leadership and impact as well as current member nominations.

Interestingly, no more than 9 percent of the Chief membership work in a single industry, which leads to cognitive diversity within the community. The average age of a Chief member is 43, and members manage over $10 billion in collective budget at their organizations and more than 100,000 employees.

Executive-level members pay $7,900 annually, while VP-level members pay $5,800 each year. Chief says that 40 percent of its members are Executives, with the other 60 percent are VPs. The company says that 30 percent of its membership base are women of color.

Chief also operates a Membership Grant program, created to promote diversity of background and thought among members, that brings the cost of an annual membership down to $3,800 for folks coming from non-corporate or underfunded organizations. The company did not disclose what percentage of customers are on the grant program.

Some napkin math then tells us that Chief is likely generating more than $10 million in revenue in 2020, on the conservative end. Kaplan and Childers say that they have a waitlist of 8,000 to join.

The new funding will be used to accelerate growth to meet demand in new cities and support the build-out of technology infrastructure. This latest round brings Chief’s total funding to $40 million.

Categories: Business News

Couchbase raises $105M Series G funding round

2020, May 21 - 9:00pm

Couchbase, the Santa Clara-based company behind the eponymous NoSQL cloud database service, today announced that it has raised a $105 million all-equity Series G round “to expand product development and global go-to-market capabilities.”

The oversubscribed round was led by GPI Capital, with participation from existing investors Accel, Sorenson Capital, North Bridge Venture Partners, Glynn Capital, Adams Street Partners and Mayfield. With this, the company has now raised a total of $251 million, according to Crunchbase.

Back in 2016, Couchbase raised a $30 million down round, which at the time was meant to be the company’s last round before an IPO. That IPO hasn’t materialized, but the company continues to grow, with 30% of the Fortune 100 now using its database. Couchbase also today announced that, over the course of the last fiscal year, it saw 70% total contract value growth, more than 50% new business growth and over 35% growth in average subscription deal size. In total, Couchbase said today, it is now seeing almost $100 million in committed annual recurring revenue.

“To be competitive today, enterprises must transform digitally, and use technology to get closer to their customers and improve the productivity of their workforces,” Couchbase President and CEO Matt Cain said in today’s announcement. “To do so, they require a cloud-native database built specifically to support modern web, mobile and IoT applications. Application developers and enterprise architects rely on Couchbase to enable agile application development on a platform that performs at scale, from the public cloud to the edge, and provides operational simplicity and reliability. More and more, the largest companies in the world truly run their businesses on Couchbase, architecting their most business-critical applications on our platform.”

The company is playing in a large but competitive market, with the likes of MongoDB, DataStax and all the major cloud vendors vying for similar customers in the NoSQL space. One feature that has always made Couchbase stand out is Couchbase Mobile, which extends the service to the cloud. Like some of its competitors, the company has also recently placed its bets on the Kubernetes container orchestration tools with, for example the launch of its Autonomous Operator for Kubernetes 2.0. More importantly, though, the company also introduced its fully managed Couchbase Cloud Database-as-a-Service in February, which allows businesses to run the database within their own virtual private cloud on public clouds like AWS and Microsoft Azure.

“We are excited to partner with Couchbase and view Couchbase Server’s highly performant, distributed architecture as purpose-built to support mission-critical use cases at scale,” said Alex Migon, a partner at GPI Capital and a new member of the company’s board of directors. “Couchbase has developed a truly enterprise-grade product, with leading support for cutting-edge application development and deployment needs. We are thrilled to contribute to the next stage of the company’s growth.”

The company tells me that it plans to use the new funding to continue its “accelerated trajectory with investment in each of their three core pillars: sustained differentiation, profitable growth, and world class teams.” Of course, Couchbase will also continue to build new features for its NoSQL server, mobile platform and Couchbase Cloud — in addition, the company will continue to expand geographically to serve its global customer operations.

Categories: Business News

On-demand storage startup MakeSpace picks up another $55M

2020, May 21 - 8:11pm

Sheltering-in-place and working from home curing COVID-19 has driven many of us to reorganize and de-clutter our living environments, and today one of the startups that is capitalizing on that trend is announcing a large round of funding to continue its growth. MakeSpace, an on-demand storage company that makes it easy to order, store and retrieve your physical belongings (also providing the muscle — that is, people — to help you do it), has closed a $55 million round — $45 million in equity funding and $10 million in debt — led by Iron Mountain, an existing investor and strategic partner whose primary focus is storage for larger businesses.

The funding is notable in part because of its size, but also because of the fact that it has happened at all.

On-demand storage startups have sprung up all over the world, hopeful that their new take on an antiquated, fragmented and valuable ($38 billion annually spent on storage) market would lead to big returns in a brave, new, Uberified world. But in reality, we’ve seen a lot of ups and downs, with various startups merging, closing, transferring and trying to pivot in the process. That’s left a consolidated space with fewer, hopefully better capitalised and better organised, competitors remaining. (Another biggie in this area is Clutter, backed by SoftBank and others, which has also been on a consolidation play as part of its growth.)

MakeSpace looks like it’s making a successful play to be in that group. This is a Series E for the startup — with other investors in the round including 8VC, Upfront Ventures, Maywic Select Investments, Ten Eighty, Provenio Capital, and CX Collective — and co-founder and CEO Rahul Gandhi said was at “a premium” to the valuation MakeSpace had in the last round of funding (a Series D that closed last year), without confirming either the previous or current numbers.

For some more context, PitchBook details what seems to have been a rollercoaster of valuations for the startup, which if accurate underscore some of those obvious challenges in this market. Update: Gandhi confirmed that the startup has now raised about $150 million and the valuation is higher than that.

MakeSpace itself has hit a number of milestones that point to its own growth. Last year, it added 20 new markets, bringing the total to 31 in North America, and doing so in a cost-effictive way. While one of the biggest costs (and stumbling blocks) for storage services to date has been grappling with building real estate businesses, MakeSpace has leaned on the infrastructure of its strategic investor Iron Mountain to bypass that challenge (and reduce those associated costs).

Gandhi said that it’s been outpacing “even our strongest forecasts,” with growth north of 30% on its targets, and he said the company has tens of thousands of customers using its service, which is priced in tiers starting at $69/month.

And while you might assume that a lack of house moving might mean less activity for storage companies, it seems the opposite is the case: MakeSpace and others like it have been designated “essential services” and its services have been in demand for people who are looking at their living spaces — and the prospect of spending significantly more time in them doing more than just watching Netflix, eating and sleeping — with new eyes. And ditto small businesses that are moving out of premises, even temporarily, or needing to rejig their environments because of distancing rules.

What’s also notable about MakeSpace is how it organises its workforce. While many on-demand businesses today have scaled by using an army of contractors, and all the complexities that this brings into the equation with regards to employee protections and benefits, MakeSpace has hired only full-time people, using its own team and those employed by Iron Mountain.

“They can get wonderful packages and all the benefits and perks to keep employee base happy,” Gandhi said. “It makes it easier to scale up the business and in terms of the hiring capabilities to help us scale.”

For a company built out of tech DNA — which is the other side of the business, involving smart logistics planning and storage optimising, and of course building it into an interface that can be used easily by workers and customers — workforce scaling and real estate/warehouse expansion are two of the biggest challenges in building on-demand storage businesses to compete with the heavyweights in the market, which include Public Storage, Extra Space Storage and U-Haul.

For Iron Mountain, it gives the firm, which focuses on enterprise users, a way to share in the revenues from tapping into the consumer market (optimizing use of its storage warehouses) without the costs of trying to service it directly.

“It has been amazing to see what MakeSpace has accomplished in the past year alone, growing from 4 to 24 markets almost overnight, and adding another 7 in 2020. They have taken a unique approach to storage that answers the modern customer’s demand for convenience, using technology to enhance the service and grow at an immense scale,” said Deirdre Evens, EVP and GM of North America Records and Information Management at Iron Mountain, in a statement.

“Especially now, services such as MakeSpace are delivering vital solutions for customers and businesses. MakeSpace has proven itself as an industry leader, finding new ways to offer support and services for this challenging time.  We continue to be both proud and excited about our partnership with MakeSpace and the opportunity to leverage Iron Mountain’s storage and logistics expertise to further penetrate the fast growing valet consumer storage market.”

Gandhi acknowledged also that while Iron Mountain is an obvious acquirer longer-term, it remains a minority investor.

“It’s really key that we remain independent,” he added. “We understand the strength of what they bring to table but in order for this business to capture major market share we felt collectively it was important for it to remain that way. At some point that discussion [on a bigger stake or acquisition] may happen but for now we feel incredibly good about what they are bringing to the table.”

Categories: Business News